We know that today we find various changes within banking products such as deposits. This is why investors have now dedicated themselves to managing their money by investing it in investment funds.
Investment funds
Do you wonder what mutual funds are? They are sets of financial or securities products in which an individual chooses to invest. There are administrators, who are dedicated to gathering the titles that when joined will become funds. Next, we will explain some different types of funds that exist.
Taxes
We must bear in mind that the person who participates in the investment fund is not taxed until what happens refund of the shares. In short, we will not give money fiscally until the investment is successful.
The different investment fund shares they play the fiscal role of considering the gain or loss of equity to the gains obtained. In a fiscal way, capital gains and losses are the variations in the value of the taxpayer's estate. The capital gain or loss will be determined by the difference between the subscription value and the redemption of the shares.
A great tax advantage of mutual funds is that it is not necessary to pay property taxes, at least not until the capital gain becomes valid and effective.
For practical purposes, we can obtain the value of the estate by means of a simple operation; We subtract the acquisition value from the transfer value. The transfer value is made up of the sale value less the expenses and taxes inherent to that sale. In turn, the acquisition value It is made up of the purchase value plus the expenses and taxes inherent to said purchase.
2015 tax reform
The tax agency has established a limit of 400,000 euros, in which the total addition of capital gains is taken into account from the year 2015 consecutively until the 400,000 euros agreed in the limit have been completed, this instead of applying it individually in each operation carried out.
There are tax and profit guides for the 2016 Income Statement, which will help you if you have doubts about the Income Statement and you will be able to consult some very important aspects about taxes.
If you've ever considered investing money to help with your mutual fund taxation, we'll tell you about it below.
What assets can I invest in?
There are different types of goods in which you can invest your money to generate profits. We are going to focus on three of the most important:
• Shares (equities)
The shares are certificates of ownership. If you buy a share, it means that you have a stake in a company or company, or which gives you the right to some things within the company. If the value of the stock goes up, the company may decide to pay shareholders.
However, if there are losses of money, then there will be no payments to the shareholders and the value of the shares may fall. The price of the stock depends on supplies and demand, which in turn are influenced by profitability, and the business prospects of the company.
• Bonds (fixed income)
With a bond, you give money to a company which in return pays you interest and pays you the borrowed amount. The difference between bonds and stocks is that bonds do not give you a stake within the company.
The bonds can be issued by a company, by regional and local authorities such as municipalities, or by the state. They can be short-term or long-term and pay high or low interest rates, depending on the creditworthiness of the debtor and the basic interest rate levels in the capital markets.
Bonds offer greater price stability than stocks, although their price may go up or down depending on changes in the interest rate or the creditworthiness of the debtor. They are recommended for investors who want to receive stable income.
• Real estate
Real estate is responsible for investments in land or buildings. If you are acquiring a building for investment purposes, the common goal is to rent the property for rental income. Generally the rent depends on the location, purpose and condition of the building.
There are other types of assets in which you can invest your money, but these three are the main and most common for investors. These three main assets have different opportunities and risks.
How do mutual funds work?
The underlying principle is simple; a large group of investors use their money to invest it in various assets such as investment bonds, stocks, among others. These investment funds are managed by companies management professionals, while being supervised by government regulators. In exchange for their investments, investors receive value assets of management companies. Investors choose from a wide range of mutual funds
Your investment goals and objectives should be described in the fund prospectus so that, together with the assets, the fund is authorized to invest.
How to know the value of the investment?
Easy; the value of investment fund shares it is established each trading day. This is done by adding the value of all the assets present and subtracting the costs related to the administration and management of the investment fund. Then, the resulting value is divided by the number of units of funds or shares, known as the net asset value or the unit price.
If what you want is to buy units of an investment fund, you can do it on any trading day called "offer price", which is equivalent to the net asset value, but often includes a premium with it.
If you want to sell the units of your investment fund again, you can do it on any trading day to the denominated "Redemption price". This price is generally equivalent to the net asset value. Also in some cases, it could include a slight discount to the total net asset value.
Advantages of investment funds
- A simple way to make a diversified investment.
- Managed by a financial professional.
- They allow investors to participate in a wide variety of investments.
Investing myths
- Investing takes a long time; Today, the investment world is very accessible to everyone. With the help of technology, information is transmitted almost instantaneously, which helps investors to know new information quickly when there are changes. Investing does not take time, if you are intelligent it will be very easy to know what information may be useful to you and you will be able to invest quickly and easily.
- Investing in the stock market is like gambling; successful investments are not like a game of chance. Investing is about balancing the risk and the returns that can come with investing in certain assets. If you have the skills to be a good investor, you can easily predict the results, based on trends, patterns, and laws of supply and demand.
- Paying a professional is better than making your own investment decisions; Many people pay large amounts of money to have their money managed by a professional investor. The main problem is that not all professional investors are successful in their service, while still getting paid for their efforts.
You have the most powerful tool there is: the internet. Now it is easy to educate yourself with the help of the internet to manage your money in a better way, even better than in a professional way.
- Investing on your own increases the risks; This may be true, if you do not have the necessary education to invest on your own. To balance risk and opportunity, you must be able to create and implement an investment plan. With proper training, investors can reduce risk by securing their returns.
- Investing is as simple as knowing what stocks to buy, of course it is important to know what stocks to buy, but it is not the only thing that is needed to invest successfully. What is also very important is knowing when to sell the stock.
Investing requires intelligence and education, but remember that being an investor does not require a genius.
Conclusion
As you can see, the mutual funds are based on basic principles and they provide easy and professional access to a variety of asset types.
In general, you can invest at buy stocks, bonds, real estate, or certain other assets directly from a bank broker, asset manager or real estate agent. You can also buy them indirectly, through a mutual fund, which is a popular approach used by millions of investors today.
We are facing a tax reform, which makes us doubt about the way in which capital gains are distributed, which are generated through investment funds in the income statement. I hope this article has helped you understand a little more about the taxation of investment funds.